The present invention provides dihydropyrazolopyridine compounds represented by the formula (I): ##STR1##

wherein each symbol is as defined in the specification, optically active forms thereof, and pharmaceutically acceptable salts thereof and hydrates thereof. The compounds of the present invention show a selective and strong inhibitory activity on glycogen synthase kinase-3 beta (GSK-3), and are useful as medicaments for prevention and/or treatment of diabetes, diabetic complications and neurodegenerative diseases or as immunopotentiators.